The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1887-02-24
Refunding the State Debt.

The finance committee have. unanimously
decided to report the bill providing for the
refunding of the State debt. Hon. James w.
Bradbury was in favor Of it. He did not
speak, however, but left his views on paper
for the committee. Judge Goddard was the
only citizen of the State who manifested in
terest enough to appear 'If am correctly
informed" he said. ''the bill before
ycu proposes to refund the State
debt in annual payments extending
over period of forty years from
June 1st, 1885, the date when the last of cur
six per cent. war loan will fall due. / also
understand that at that date, it is estimated
by the treasurer and by the committee, that
theaentire State indebtedness will not exceed
$2,S00,000, so that the contemplated annual
payments towards the reduction of the debt
after 1889 will be $4,000 only. The contem-
plated rate of interest being per cent, it is
evident that the interest charge in 1890 will
be $S4, 900, and the average annual payment
for principal and interest for forty years
about $4,000.
Il beg leave respectfully to submit some of
my reasons Tor protesting against the enact
ment of such a bill by the present legislature.
Il. lnasmuch as no bond is payable before
June list, 1882 there is no occasion for any
legislation on the subject at the present ses-
sion: and as it is manifestly impossible to
call in per cent. bonds except at a wasteful
premium, the passage of the proposed bill by
the present legislature would seem prema-
ture and unjustifable.
''2-I protest against the issue of long
bonds without reserving to the State the op-
tion of redemption after a short period The
proposition before you, If l understand it,
is to issue bonds, some running for one
year only, and others for forty years, and
others still for every intermediate year, but
all by their terms irredeemable until the year
of their maturity" To show the folly of
this Judge Goddard explained the 'wOeful
experience of the State of Maine and of the
city of Portland" in issuing long bonds with
no option of redemption. The Maine legis-
lature of 1864 issued a % years per cent.
loan of S3,000,000 under which we are to
grOan until 1889: and this in addition to a
S525,0O0 6 per cent. 20 years loan issued in
1868. These two loans were made after Sec
retary Chase had invented Exceptional prin-
ciple, and Judge Goddard styles these acts
of the legislature as 'stupendous folly"
But in 1868 the legislature again launched
upon the State another $3,0o0,000 loan for
20 years at per cent, on which, said Judge
Goddard, 'we have been paying double the
market rate of interest for many years. Had
it not been for these blunders OF 1868, 1864
ands 1868, we should, in 1885, have been free
from debt" AS late as 1872 a city loan of
$1,80O,000, at per cent, was saddled upon
the people of'Portland, and three-fourths of
it will will remain until 1907 and the rest
until 1897.
81 deprecate such prolonged exten-
sion of our State debt.
The original debt was, in round numbers,
$S,000 000,-in 1889 we are told that but $2,-
100000 will remain. If within twenty-five
years we have been able to pay off $5,200,000
or 60 per cent of our Indebtedness, besides
| the oppressive and needless burden of 6 per
| cent interest on so large debt, can it be
| possible that necessity or good statesman
ship requires 40 years more to pay off tie
| comparatively small sum of $2.S00,000 with
an interest charge of only three per cent?"
/ lu1On Goddard aantpndQ1 that III xvoul6 ba
| found on computation that yearly tax of
one mill and third upon the valuation of
1880 will discharge the estimated indebted
ness Of the State within eleven years after
1885,
Judge Goddard asked the committee what
they proposed to do with the $420,000 surplus
which would be paid into the State from the
National treasury in a few weeks if the
House concurs with the Senate in the pas
sage of the bill returning to the States their
| quota Of direct war taxes? Saying in con-
clusion: What premium ON extravaganza
ana waste would the presence of such a sur
! plus in our treasury offer?"
In conclusion Judge Goddard summed M
his conclusions as follows:
Ito postpone until the next Legislature
the refunding of the State debt and the ere
| alton of a new State loar."
No part OF our present indebted
| ness natures Tor more than two years, VIZ
until June, 1889. The matter is an import
| ant one and sufficient time for its due con-
sideration and discussion has not been af-
forded to the people since its first unexpect-
ed suggestion by the Governor in January.
of, however, legislation is insisted on
at this session. more than two years in ad-
vance, then l would advise as the next best
alternative, the issue of a State loan of ten
years from June /, 1889. for the balance of
the debt then remaining unpaid, presumably
So, 800, 900 or 81. 400, 600 as the case may PEI
with suitable provision for a sinking fund
sufficient to extinguish the debt at maturity
and leave the State free from indebtedness
in 1899. | should hope to see such loan
negotiated at par at a rate of interest from
| D to 3-4 per cent"
"3-If for any reason sinking. fund is OBJ
| jected to, then, as the nextplan, would rec
| ommend a loan for the same sum payable In
| ten annual installments. not equal in amount
but in such amounts as would equalize the